Strait Corporation Uses the Following Standard Costs for a Single

question 79

Multiple Choice

Strait Corporation uses the following standard costs for a single unit of product: $$\begin{array} { | l | l | } \hline \text { Direct labor (5 hows @ \$12hour) } & \$ 60 \\\hline \text { Overhead (4 hours @ \$7hour) } & \$ 28 \\\hline\end{array}$$ Actual data for the month showed overhead costs of $524,000 for 20,000 units produced.What is the difference between actual overhead costs and standard overhead costs allocated to products?

• A)$384,000 favorable
• B)$384,000 unfavorable
• C)$ 36,000 favorable
• D)$ 36,000 unfavorable

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Definitions:

Future Costs

Costs that have not yet been incurred but are expected to be spent in the future for operational or investment purposes.

Alternatives

Different options or strategies available for consideration in decision-making processes.

Original Cost

Original Cost refers to the initial monetary value spent to acquire an asset, including purchase price and any other associated costs necessary to get the asset ready for use.

Increased Revenues

The growth in money that a company brings in from its operations, indicating a rise in sales or other income sources.